How would you approach a real customer segmentation project for a retail bank?

Question

Hi,

I'm working on my first customer segmentation project for a big retail bank. The bank currently do not have segments for their customers, other than age etc. but nothing defined to drive business value and targeted sales/service.

My final deliverable will be 3 possible options for segments.

As I have never done a customer segmentation piece before, I'm hoping to source some ideas on what approach to take (e.g. what would an issue tree look like, how should I be utilising data, what's the framework here - need-based, past behaviour based and demographic profiles?)

I appreciate any guidance on this.

Thank you!

Answer 1

Hi Anonymous,

I agree with Vlad that the final goal of the analysis is critical to define a proper segmentation and therefore the first level of a structure. Possible examples of segmentation for a second level of the structure include:

Age groups
Income level
Location
Profession
Type (individual/company)
Current products used
Target goal of the customer

Hope this helps,

Francesco

Answer 2

Hi,

It's very much a mathematical / research task that depends on objectives, products you are considering, etc. I recommend leveraging the knowledge base of your consulting company (I assume you are working in consulting) to find the relevant approaches.

Best

Answer 3

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